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Akkipeddi Gopalasastry Vs. Vijayawada Engineering Metal Co. Ltd. - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtAndhra Pradesh High Court
Decided On
Case NumberLetters Patent Appeal Nos. 21 and 22 of 1966
Judge
Reported inAIR1968AP41
ActsLimitation Act, 1908 - Schedule - Articles 49, 115 and 120; Code of Civil Procedure (CPC), 1908 - Sections 12 - Order 2, Rule 2
AppellantAkkipeddi Gopalasastry
RespondentVijayawada Engineering Metal Co. Ltd.
Appellant AdvocateP.P. Suryarao, Adv.
Respondent AdvocateM.V. Subbaraya Sastry, Adv.
DispositionAppeals dismissed
Excerpt:
.....failed to deliver in spite of various notices issued to him the plaintiff finally sold the workshop machinery to a third party on 31-5-1955. it la the plaintiffs case that in spite of a telegraphic notice, ex. 4 dated 31-5-1955 the defendant failed to open the locks of the workshop and that therefore the plaintiff had to break open the workshop and take forcible delivery of possession in the presence of mediators on 31-5-1955. thereafter, the plaintiff filed on 31-3-1958 the suit o. the claim for account is based upon clause (4) of the agreement, ex a-1 which clearly provides that the defendant should maintain proper accounts and that out of the net profits the plaintiff should get re. on the question whether the defendant delivered possession of the workshop on 21-10-1953 the..........break open the locks and take possession of the property on 31-5-1955 when he discovered that the suit articles were missing. the argument of sri surya rao, the learned counsel for the appellant is that his client's prior assertion in various letters to the effect that he had already delivered possession amounts to an implied refusal. we are unable to accept this argument. taking therefore the date of ex. b. 4 viz., 31-5-1955, the period of three years expired during the summer vacation of 1958 when the lower court was closed. the suit was filed on the reopening day of the trial court. it is also not disputed by the learned advocate for the appellant that if the time begins to run under article 49 from 31-5-1955 the suit is in time.11. there is, however, another point which was argued.....
Judgment:

1. These two letters Patent Appeals arise out of two connected suits O. S. 10 of 1959 and O. S. 16 of 1959 on the file of the Addl. District Judge, Krishna. The defendant who is the same in both the suits is the appellant in the above appeals which arise under the following circumstances: The plaintiff who is the same in both the suits is the liquidator of a company called the Vijayawada Engineering Metal Co., Ltd. The said Company was started in 1947 and its workshop (foundry) was worked till the year 1959 when it was closed due to mismanagement. The Company fell into debts and was accordingly wound up voluntarily. As a result thereof the plaintiff was appointed as a liquidator to wind up the said Company by disposing of the machinery, etc. As the machinery was not in working order, the plaintiff wanted to put the same in working order before he could sell the same. Accordingly, the plaintiff, entrusted the same to the defendant who was related to him and requested him to put the workshop and machinery in working order so that it may be easily sold out to third parties. Thereupon an agreement, Ex-A-1 dated 14-3-1953 was executed between the plaintiff and the defendant, the material conditions of which are as follows:

(1) The period for working the machinery was two years.

(2) The defendant should invest all capital for working the machinery.

(3) The defendant should keep accounts and pay Re. 0-6-0 out of the net profits to the plaintiff keeping the balance of Re. 0-10-0 for himself.

(4) The Company will not be liable for any loss sustained by the defendant's management.

(5) The defendant should deliver possession of the workshop with all its machinery if the defendant did not work for a period of three months consecutively.

On the same day (14-3-1953) the plaintiff executed another letter in favour of the defendant directing him to make the necessary repairs and replacements to the building and machinery and providing that the expenses incurred should be paid to the defendant by the plaintiff. The plaintiff again executed another letter dated 16-3-1953 authorising the defendant to dispose of certain scrap samans entrusted to him so that the defendant may reimburse himself out of the monies realised by the sale of the scrap samans. As per the terms of the agreement, the defendant was put in possession of the machinery and the parts on 14-3-1958 itself. It may be stated that there was a good deal of correspondence between the plaintiff and the defendant wherein the defendant claimed to have stopped the working on 21-10-1953 as per the instructions of the plaintiff and delivered the machinery, etc., to the plaintiff while the plaintiff denied that he ever asked the defendant to stop working of the workshop or that he took delivery of the machinery that the defendant failed to deliver in spite of various notices issued to him The plaintiff finally sold the workshop machinery to a third party on 31-5-1955. It la the plaintiffs case that in spite of a telegraphic notice, Ex. B. 4 dated 31-5-1955 the defendant failed to open the locks of the workshop and that therefore the plaintiff had to break open the workshop and take forcible delivery of possession in the presence of mediators on 31-5-1955. Thereafter, the plaintiff filed on 31-3-1958 the suit O. S. 239/ 58 on the file of the District Munsif's Court, Vijayawada subsequently transferred and registered as O. S. No. 16 of 1959 on the file of the Additional District Judge, Krishna for settlement of accounts and for recovery of his share of the profits. As the plaintiff discovered that a large number of machinery parts originally entrusted to the defendant were found missing when they were taken delivery of by the plaintiff the plaintiff instituted another suit on 19-6-1958 as O. S. 114 of 1958 in the Subordinate Judge's Court, Vijayawada which was subsequently transferred and registered as O. S. 10 of 1959 on the file of the Additional District Judge, Krishna for the recovery of the lost articles or for their value, namely, Rs. 6,000.

2. We will first take up the suit for account, viz., O. S. 16 of 1959 out of which L. P. A. 22 of 1966 arises. The claim for account is based upon clause (4) of the agreement, Ex A-1 which clearly provides that the defendant should maintain proper accounts and that out of the net profits the plaintiff should get Re. 0-6-0 share. The defendant, while admitting the liability to account, pleaded firstly that he had already sent copies of account to the plaintiff and that he was no longer bound to render any account and secondly that the suit was barred by time under Article 115 of the Limitation Act of 1908. The trial Court upheld the defence of limitation and dismissed the suit. On appeal by the plaintiff in A. S. 352 of 1861, our learned brother Narasimham, J. held that the suit is governed by Article 120 of the Limitation Act and that it is within time and accordingly passed a preliminary decree for accounting upto 21-10-1953 when the defendant claimed to have delivered possession of the workshop to the plaintiff. On the question whether the defendant delivered possession of the workshop on 21-10-1953 the trial Court as well as Narasimham, J. on appeal found against the plea of the defendant. There is however no appeal by the plaintiff that he is entitled to accounting till the date of taking delivery of possession, viz. 31-5-1955.

3. Sri P. P. Surya Rao, the learned Counsel for the appellant, contended that the suit is in substance one for compensation for breach of a contract not specially provided for and that Article 115 of the Limitation Act governs the suit. He argued that the defendant repudiated the contract on 21-10-1953 itself and that there was accordingly a breach of the contract which was more than three years from the date of the suit. We are unable to accept this argument because the suit is not based upon a breach of contract. As already seen, it is based upon an agreement to render an account to the plaintiff. The defendant was not boundunder the contract to work the foundry till the expiry of the period of two years. He was put in possession merely to run the foundry so as to bring it into a working condition for the ultimate purpose of selling the property. The agreement further provided that if the defendant stopped working for a period of three months, the agreement gets cancelled It is therefore clear that the defendant has got the option to stop the working of the workshop and there was no obligation on him to work the same for a period of two years. Hence a mere stoppage of work by the defendant did not amount to a breach of any obligation. We are therefore inclined to hold that the basis of the suit is not one of breach of contract but one for rendition of accounts on the basis of an agreement between the parties.

4. It is also not disputed by Sri Surya Rao that if Article 120 of the Limitation Act applies, the suit is in time. There being no other specific Article governing the present suit, the residuary Article, namely Article 120 of the Limitation Act governs the present suit and hence we hold that the suit is in time.

5. Regarding the contention of the defendant that he already rendered accounts, it is common ground that there was no mutual settlement of the accounts in the sense that the plaintiff admitted or signed in token of the correctness of the defendant's accounts. The defendant ought to have obtained the signature of the plaintiff in token of his acceptance of the accounts. In the absence of any such evidence, there can be no doubt that the defendant is liable to render an account.

6. We may, however, before concluding advert to one argument which as addressed in the Court below, namely, that the agreement Ex. A-1 was a lease, that it was Inadmissible for want of registration, etc. But if we look at the language of the documents and the evidence of the defendant, the parties proceeded on the footing that it was a mere agreement whereby the defendant was put in possession of the workshop to bring it into a working condition on terms of sharing profits analogues to a partnership agreement. In view of the clear recital in Ex. A-1 whereby the defendant agreed to pay a share of the profits it is not necessary for us to decide whether the document is a lease or otherwise In this view, we dismiss L. P. A. No. 22 of 1966 with costs.

7. We will now turn to the other suit O. S. 10 of 1959 out of which L. P. A. No. 21 of 1966 arises As already stated this suit is filed for the recovery of the missing parts of the machinery or in the alternative for recovery of Rs. 6,000 being their value. The basis of this claim is that the machinery and the said parts were handed over by the plaintiff to the defendant on 14-3-1953 i.e., the date of the agreement Ex. A-1 and that after the expiry of the said agreement, the defendant refused to deliver the same in spite of demand. The defendant contended that ha had already delivered the machinery including all the parts on 21-10-1953 itself to the plaintiff and that the suit in any event is barred by limitation under Article 115 of the Limitation Act. On the question, namely whether the defendant delivered the machinery to the plaintiff, the trial Court as well as our learned brother negatived the plea of the defendant. It is admitted by the defendant that there is no documentary evidence in the shape of any receipt or otherwise establishing the fact of delivery of the machinary to the plaintiff. It is very unlikely that the plaintiff would have taken the trouble of breaking open the premises in order to take delivery of the machinery if the defendant had already delivered the same. We are unable to accept the suggestion of the defendant that the plaintiff's case of breaking open the locks is a make believe affair. The defendant stated in his evidence as D. W. 1 that one Katikala Venkata Subbaiah was present at the time of the alleged delivery of possession of the machinery. The said Venkata Subbaiah has not been examined by the defendant as a witness and there is no explanation at all as to his non-examination. The defendant has not been able to establish that the missing parts were never entrusted to him originally We have therefore, no hesitation in agreeing with the Courts below that the defendant had not delivered possession of the machinery and that he was therefore liable to return the missing parts or their value.

8. Coming to the question of limitation, Sri P. P. Surya Rao the learned counsel for the defendant-appellant, argued that the suit is one for damages for breach of a contract and that the same is barred under Article 115 of the Limitation Act. We have no doubt that the suit is not based on any breach of the contract. It was a suit to recover the articles or their value on the allegation that the goods were originally entrusted to the defendant for a certain purpose, that in spite of demand, the defendant failed to comply with the same. Such a suit is in our opinion governed by the specific Article 49 of the Indian Limitation Act. Our learned brother, however, held that the suit is in time under Article 120 of the Limitation Act. We are with due respect to our learned brother unable to agree with the said reasoning But we have come to the same conclusion that the suit is in time even if Article 49 is applied to the instant case. When there is a specific Article, namely Article 49 of the Limitation Act governing the case, the residuary Article 120 cannot be Invoked. Hence we have to examine the scope and| applicability of Article 49 of the Limitation Act

9. Article 49 of the Limitation Act provides for a suit for recovery of specificmovable property or for compensation for wrongfully detaining the same and a limitation of three years is fixed starting from the date when the detainer's possession becomes Unlawful. The question, therefore, is when the defendant's possession became unlawful. The document, Ex. A-1 provides that the entire machinery should be delivered by the defendant to the plaintiff in proper working order at the end of the term of 2 years. In such a case, it has been held that the detainer's possession does not become unlawful on the mere expiry of the term but that the possession becomes unlawful when there was a demand and a refusal by the defendant. In Gopalasamiayyar v. Subramania Sastri, (1912) ILR 35 Mad 836 a Division Bench of the Madras High Court, following an earlier ruling in Subbakka v. Maruppakkala, (1892) ILR 15 Mad 157 held that where a person to whom movable property is entrusted to ,be returned on the fulfillment of certain conditions retains such property after such conditions are fulfilled, he will be deemed to be in possession on behalf of the owner until he refuses the delivery and that the period of limitation starts under Article 49, from the date when the defendant refuses to deliver such property. The same view was also taken by the Allahabad High Court vide Laddo Begum v. Jamal-ud-din, ILR 42 All 45=(AIR 1920 All 353 (2)).

10. Applying the above principles to the instant case, we are Inclined to hold that the demand and refusal can be Inferred from the recitals in Ex. B-4 which was a telegram issued by the plaintiff to the defendant on 31-5-1955 wherein the plaintiff demandeo the delivery of possession and intimated to the defendant that if he did not bring the keys on that day he would take delivery in the presence of mediators. The defendant did not comply with this demand and accordingly the plaintiff was compelled to break open the locks and take possession of the property on 31-5-1955 when he discovered that the suit articles were missing. The argument of Sri Surya Rao, the learned counsel for the appellant is that his client's prior assertion in various letters to the effect that he had already delivered possession amounts to an implied refusal. We are unable to accept this argument. Taking therefore the date of Ex. B. 4 viz., 31-5-1955, the period of three years expired during the summer vacation of 1958 when the lower Court was closed. The suit was filed on the reopening day of the trial Court. It is also not disputed by the learned Advocate for the appellant that if the time begins to run under Article 49 from 31-5-1955 the suit is in time.

11. There is, however, another point which was argued in the Courts below, namely that the suit O. S. 10/59 was barred by the provisions of Order 2 Rule 2 C. P. C. Our learned brother held that there is no bar under Order 2 Rule 2 because the reliefs prayed for in the two suits arise out of different causes of action. It is also not seriously contended by Sri Surya Rao that Order 2 Rule 2 C. P. C. bars the present suit. We are inclined to agree with the finding of the Courts below that on the facts of the present case there is no bar under Order 2, Rule 2, C. P. C.

12. In the result, L. P. A. 21 of 1966 also fails and is dismissed. In view of the conduct of the defendant and the false pleas set up by him, we are inclined to award costs to the plaintiff in this appeal also. Accordingly L. P. A. 21/66 is also dismissed with costs.


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